Portfolio Design

Investment Policy Statement

Bristlecone guides clients through the development of their investment policy statement. Through this process, we articulate an over-arching strategy for our clients to achieve their life goals within the context of their unique guidelines and sound financial theory. This document becomes an "investment compass" ― an indispensable tool for supervising, managing, monitoring and evaluating each client's investment assets.

Elements of the statement include:

  1. Statement of Objectives ― identify important financial goals that will drive the entire investment process.
  2. Investment Guidelines and Policy ― set client-specific portfolio constraints.
  3. Communication Plan ― articulate frequency and content of ongoing Bristlecone/client communications.

A comprehensive policy statement dramatically improves the likelihood of success by removing ambiguity, providing clear guidance, and establishing accountability for all parties involved. While this document is geared toward long-term results, Bristlecone reviews it with each of our clients at least annually to ensure its relevance in light of either changes in personal circumstances or extraordinary market conditions.

Asset Allocation

We believe the asset allocation decision should be made at two levels ― the portfolio level and the asset class level.

Portfolio level asset allocation is the most important wealth management decision that a family will make, as it drives a portfolio's long-term risk characteristics and reward potential. We employ a disciplined after-tax, after-fee portfolio optimization approach based on well-reasoned performance expectations for a variety of traditional and nontraditional asset classes. We can readily model client portfolios under a variety of assumptions, such as concentrated equity positions, asset locations (e.g., trusts, family partnerships), economic environments, and changing tax rates. The combination of our collective professional judgment and exhaustive quantitative analysis generates asset allocation guidelines in accordance with individual client objectives.

Once the strategic portfolio allocation is set, we seek to optimize the asset class level allocation. Overall portfolio risk can be effectively managed by examining the exposures within each asset class to ensure proper diversification and complimentary strategies/styles. Not only are we selecting best-of-breed managers, but we attempt to combine them in an effort to maximize risk-adjusted return.